Renewable Energy Industry Eyes Budget 2026 for Grid, Storage Support

India’s power sector reached historic benchmarks in 2025 in energy generation, transmission and distribution. India successfully met a record maximum power demand of 242.49 GW during the 2025–2026 fiscal year while lowering the country's energy shortages to 0.03%, according to a Ministry of Power press release.

Compared to the 4.2% shortage noted in the 2013–14 period, this represented a substantial decrease. Infrastructure development and a focus on sustainable energy availability for both rural and urban consumers demonstrated the sector's growth.

According to official data, India's installed power generation capacity increased by 104.4% since 2014 to 509.743 GW as of November 30. By October 2025, 51% of this capacity came from non-fossil fuel sources, assisting the nation in meeting its Nationally Determined Contribution goal five years ahead of schedule for 2030.

Even as India makes steady progress toward its clean energy ambitions, Budget 2026 presents an opportunity to address infrastructure gaps.

Expectations from Industry

Commenting on the need to fix transmission infrastructure, Laxit Awla, CEO, SAEL, stated that the 2026 Union Budget needs to frontload transmission infrastructure investments to fix grid stability and curtailment bottlenecks. It would entail strategic capital allocations to fast-track development of green energy corridors and deploy grid-scale battery storage with long-term offtake commitments. This will align evacuation capacity with generation reality, help cut congestion and improve utilisation.

“Extending PLI scheme across the solar value chain and encouraging green financing can bring in private capital to scale domestic manufacturing capacity and make the sector more resilient,” he asserted. He believes that Budget 2026 can fill the infrastructure gap and provide a backbone for Viksit Bharat's clean energy goals.

Speaking about solar energy sector, Vinay Rustagi, Chief Business Officer at Premier Energies, said that the renewable sector has been a major priority area for the government and we expect more favourable announcements supporting the sector in this budget. “The two signature schemes, PM Surya Ghar Yojana and PM KUSUM are expected to ramp up significantly and should get much higher budgetary allocation. We are also expecting rollout of the PM KUSUM 2.0 scheme with higher targets and incentives,” he asserted.

In addition, Rustagi underscored other focus areas which should receive incentive packages for R&D as well as local manufacturing of ingots and wafers to improve self-sufficiency for Solar module manufacturing. As the battery storage segment is becoming critical for the power sector, we also expect favourable moves in relation to indirect taxes and import tariffs for the same.

The news release by Ministry of Power underscored that around 178 GW of renewable energy capacity, including large hydro, has been added in India’s energy mix since April 2014. This includes 130 GW of solar power, 33 GW of wind power, 3.4 GW of biomass, 1.35 GW of small hydro and approximately 9.9 GW of large hydro generation capacity, demonstrating India’s strong commitment to clean energy.

According to Sunil Rathi, Executive Director, Waaree Energies Limited, believes that the Union Budget 2026 is being seen as a critical opportunity to move India decisively into the next phase of its clean energy transition, where energy storage is positioned as being as central as generation. To unlock this inflection point, policy support is required across three core pillars. First, deeper support for vertically integrated manufacturing—spanning solar, batteries and energy management systems—to build resilient domestic supply chains and reduce import dependence. Second, a more expanded and more flexible viability framework is needed to enable large-scale deployment of storage, particularly when integrated with solar and hybrid projects. Third, greater emphasis on domestic value addition is essential to catalyse skilled employment and enhance long-term manufacturing competitiveness.

“When solar and storage scale together, India’s clean energy journey moves from capacity creation to system leadership. With the right policy push, India can not only achieve its 2030 targets with confidence, but also emerge as a global hub for clean energy manufacturing and technology,” he concluded.